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1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA BIMBO BAKERIES USA, INC., Plaintiff, vs. CHRIS BOTTICELLA, Defendant. ) ) ) ) ) ) ) ) CIVIL ACTION NO. 2:10-cv RBS DEFENDANT CHRIS BOTTICELLA S PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW conclusions of law. Defendant Chris Botticella submits the following proposed findings of fact and FINDINGS OF FACT 1. Mr. Botticella is a senior-level bakery operations executive who began working for Plaintiff Bimbo Bakeries USA, Inc. ( BBakeries ) in Hr g Tr. 131:4-12, Jan. 25, He has worked in the baking industry for more than thirty-eight years. Id. 80: In eight-plus years of employment with BBakeries, Mr. Botticella received uniformly excellent performance evaluations, and his honesty and loyalty to the company were never questioned. Id. 131:13-132:3. 3. In or about January 2009, BBakeries merged with or acquired the baked goods unit of George Weston Ltd. Through this transaction, BBakeries acquired certain facilities at which Thomas English Muffins are manufactured. Id. 93:8-12.

2 for California. Id. 68: In 2009, Mr. Botticella was the Vice President of BBakeries operations 5. Because BBakeries western operations were not profitable as of January 2009, BBakeries executives including Mr. Botticella and Senior Vice President Daniel Babin embarked on a painful learning process following the January 2009 transaction, the goal of which was to increase the profitability of these western operations. Id. 92:5-93:3. 6. Mr. Botticella grew unhappy with BBakeries over the course of the year 2009 due to the painfulness of this process. Id. 134: On September 28, 2009, Interstate Brands Corporation, another bakery company, which later changed its name to Hostess Brands, Inc. ( Hostess ), offered Mr. Botticella a new employment position as its VP Bakery Operations, East, which he accepted on or about October 15, BBakeries Hr g Ex. 3; C. Botticella Dep. 78:12-15, Jan. 21, The new position at Hostess was to pay $200, per year, which would constitute a pay cut of $50, per year compared to his salary with BBakeries and require a relocation from California to Texas. Hr g Tr. 134:20-24; BBakeries Hr g Ex BBakeries and Hostess are two of only four major competitors in the baking industry. Hr g Tr. 66:24-67: Mr. Botticella chose to remain with BBakeries until January 2009 for two reasons: to ensure that he would receive his bonus for 2009 and to complete two BBakeries projects for which he had responsibility. Id. 132:18-133:12; C. Botticella Dep. 119:08-24, 120:11-121:

3 11. On December 7, 2009, Hostess directed Mr. Botticella to execute an Acknowledgment and Representation Form, which stated that Mr. Botticella would not share any confidential or proprietary BBakeries information with Hostess after beginning his new employment there, and that Hostess management was not interested in obtaining any such information from Mr. Botticella. BBakeries Hr g Ex On January 4, 2010, Mr. Botticella informed his supervisor, Joe Dangelmeier, that he was planning to leave BBakeries effective January 15, BBakeries Hr g Ex There is no evidence that anyone at BBakeries asked Mr. Botticella at this time where he would be going, nor is there any evidence that Mr. Botticella ever denied that he would be joining Hostess. 14. The parameters of Mr. Botticella s rights to compete against BBakeries are set forth in a Confidentiality, Non-Solicitation and Invention Assignment Agreement. BBakeries Hr g Ex. 8. This agreement prohibits Mr. Botticella from competing against BBakeries only during his employment with BBakeries. Id. 2. Following the cessation of employment with BBakeries, Mr. Botticella is prohibited only from using or disclosing BBakeries business information, and soliciting employees or customers. Id There is no evidence that Mr. Botticella s new position with Hostess would involve any responsibility for English muffin production. Hr g Tr. 129:15-130: There is no evidence regarding what Mr. Botticella s responsibilities will be in his new position at Hostess

4 17. There is therefore no evidence that it will be impossible for Mr. Botticella to perform his job at Hostess without using or divulging confidential information of BBakeries. 18. During his last month of employment with BBakeries, consistent with the terms of the Acknowledgment and Representation Form that he had executed for Hostess on December 7, 2009, Mr. Botticella deleted all confidential materials that he would receive from BBakeries sales department, without reading them. BBakeries Hr g Ex. 7; C. Botticella Dep. 91:21-92:12. Mr. Botticella also made an effort not to look at certain other confidential BBakeries documents during this time period. C. Botticella Dep. 125:11-20, 126: During the holiday season immediately prior to the cessation of his employment with BBakeries, Mr. Botticella undertook to delete any of his personal materials that were stored on his company laptop. Id. 131:21-133:21. These materials included his résumé, pictures, and old presentations on which he had worked in the past. Id. 132:17-24; Hrg. Tr. 48: In the process of deleting such personal materials, Mr. Botticella accidentally deleted certain work files. C. Botticella Dep. 132:3-16, 133: As a result, he then asked BBakeries information technology specialist to restore the files. Id. 21. During his final month at BBakeries, Mr. Botticella also used an external device to practice his computer skills specifically, transferring files. Id. 138:18-139: The evidence observed by BBakeries computer forensic expert, Brian Harris, is consistent with this type of usage. Hr g. Tr. 47:19-48:

5 23. Many of the files on which Mr. Botticella practiced were stale or nonconfidential. Id. 50:23-51:3, 52:2-53: There is no evidence that Mr. Botticella retained possession of any confidential documents when he left his employment at BBakeries. 25. All access to documents on Mr. Botticella s computer took place during BBakeries normal business hours. Id. 50: CONCLUSIONS OF LAW 1. To obtain a preliminary injunction, a movant must establish that (a) success on the merits is likely, (b) irreparable injury will result if the requested injunction is denied, (c) granting the injunction will not cause even greater harm to the non-movant, and (d) the public interest favors the granting of injunctive relief. Rogers v. Corbett, 468 F.3d 188, 192 (3d Cir. 2006). 2. It is not likely that BBakeries will succeed on the merits in this case. BBakeries request for this Court to enjoin Mr. Botticella from working for Hostess is premised on its allegation that, in the absence of an injunction, it would be inevitable for Mr. Botticella to disclose confidential BBakeries trade secrets to Hostess in the course of that employment. 3. The inevitable disclosure doctrine is inapplicable to this matter and BBakeries should not be permitted to rely upon the doctrine as support for its preliminary injunction request. BBakeries memorialized the parameters of Mr. Botticella s right to compete in its Confidentiality, Non-Solicitation and Invention Assignment Agreement of March 13, 2009, which prohibited Mr. Botticella from competing against BBakeries only while employed - 5 -

6 by BBakeries. BBakeries Hr g Ex. 8. The agreement did not place any restrictions upon Mr. Botticella s rights to seek or obtain employment from competitors following the cessation of his employment with BBakeries, provided that he not use or disclose confidential information of BBakeries and that he refrain from soliciting BBakeries customers and employees. Id. Considering that BBakeries had every opportunity to restrict Mr. Botticella s post-employment rights to compete but freely chose not to add such language to its own agreement, it was clearly the intent of both BBakeries and Mr. Botticella to allow Mr. Botticella to compete after leaving BBakeries employ, subject only to the confidentiality and non-solicitation restrictions in the agreement. This clearly expressed contractual intent should trump a loose application of the inevitable disclosure doctrine. 4. Further, under Pennsylvania law, employee non-compete agreements are disfavored as a trade restraint that prevents a former employee from earning a living. Hess v. Gebhard & Co., 570 Pa. 148, 157, 808 A.2d 912, 917 (2002). Thus, they are strictly construed, Harry Blackwood, Inc. v. Caputo, 434 A.2d 169, 170 (Pa. Super. 1981), and are enforceable only if, among other things, they are reasonably limited in time and geographic scope. Bilec v. Auburn & Assoc. Pension Trust, 588 A.2d 538, 541 (Pa. Super. 1991). Plaintiff s request that the Court enjoin Mr. Botticella from working for Hostess is, in essence, a request that the Court rewrite the contract between the parties, in derogation of the above-stated principles. 5. Moreover, even if it assumed arguendo that the inevitable disclosure doctrine applies to this case, BBakeries is not entitled to a preliminary injunction because it has failed to satisfy the doctrine s requirements

7 a. As discussed in greater detail in Mr. Botticella s bench memorandum of January 22, 2010, under Pennsylvania law, a former employer may obtain an injunction barring a former employee from accepting new employment based on a theory of inevitable disclosure only if the former employer establishes that it would be impossible for the employee to perform his duties at the new employer without disclosing trade secrets. Bacharach, Inc. v. Testo, Inc., No WDA 2009, at 9 (Pa. Super. Sept. 4, 2001) (copy of opinion attached hereto as Exhibit A) (explaining and applying Air Prods. & Chems., Inc. v. Johnson, 442 A.2d 1114 (Pa. Super. 1982)). 1 It is insufficient even if the former employee establishes that its former employee is likely to disclose such trade secrets. Id.; see also Victaulic Co. v. Tieman, 499 F.3d 227, 234 (3d Cir. 2007). b. Here, BBakeries has failed to establish even that disclosure by Mr. Botticella to Hostess will be likely upon the commencement of his new employment, let alone impossible to avoid. Indeed, BBakeries has failed to introduce any evidence showing that Mr. Botticella s new job duties would be similar to those he had with BBakeries, or even any evidence describing what those new job duties will be (other than the admission of BBakeries witness, Mr. Babin, that Mr. Botticella will have no responsibility for English muffins at Hostess). Hr g Tr. 129:15-130:2. Thus, BBakeries has fallen woefully short of sustaining its 1 Even in Air Products, the court did not prevent the employee from working for a competitor. To the contrary, the trial court ruled that the defendant (Mr. Johnson) could commence working for the new employer (Liquid Air), but simply enjoined Liquid Air from employing Mr. Johnson in its on-site operations, which represented one small component of the new employer s business. 442 A.2d at The Superior Court affirmed that ruling

8 burden of proving that Mr. Botticella would inevitably use or disclose its trade secrets and confidential information during his employment with Hostess. c. There is also no evidence that Mr. Botticella has any inclination to provide Hostess with confidential information from BBakeries. Mr. Babin admitted that in eight-plus years of employment with BBakeries, Mr. Botticella received uniformly excellent performance evaluations, and that his honesty and loyalty to the company were never questioned. Id. 131:13-132:3. Likewise, there is no evidence that Mr. Botticella retained any confidential documents when he left BBakeries. Even BBakeries own computer forensic expert, Mr. Harris, testified that Mr. Botticella s computer usage was consistent with his testimony that he only used a thumb drive to practice file transfers, that all such activity took place during BBakeries normal business hours, and that many of the files on which Mr. Botticella practiced were stale or nonconfidential. Id. 47:19-48:6, 50:13-51:3, 52:2-53:20. In addition, Mr. Botticella demonstrated that he had no inclination to divulge confidential information to Hostess when he signed Hostess Acknowledgment and Representation Form on December 7, BBakeries Hr g Ex For the same reasons discussed above, BBakeries has also failed to show that it would suffer irreparable injury in the absence of an injunction. BBakeries has failed to introduce any evidence of what Mr. Botticella s new job duties will be. Thus, there is no evidence in this record that would support a finding of this Court that Mr. Botticella s performance of his duties at Hostess will cause any injury, let alone irreparable injury, to BBakeries. 7. Similarly, BBakeries cannot dispute that granting the injunction will cause even greater harm to Mr. Botticella. As Mr. Babin himself acknowledged in his testimony - 8 -

9 before the Court, Mr. Botticella has worked in the baking industry for more than thirty-eight years. Hr g Tr. 80:4-5. Hostess and BBakeries are two of only four competitors in the baking industry. Id. 66:24-67:3. The number of executive-level positions within Mr. Botticella s expertise is therefore extremely limited, and even if a position were available with one of the other two competitors in the industry, BBakeries would presumably seek to enjoin Mr. Botticella from being employed there as well. BBakeries motion for an injunction preventing Mr. Botticella from working for Hostess is therefore equivalent for all practical purposes to a request to prevent Mr. Botticella from being employed at all. 8. Finally, BBakeries cannot establish that public policy favors its request for a preliminary injunction. Pennsylvania law clearly disfavors non-compete agreements and closely construes them against employers. See, e.g,. Hess v. Gebhard Co., 769 A.2d 1186, 1191 (Pa. Super. 2001), rev d on other grounds, 570 Pa. 148, 157, 808 A.2d 912, 917 (2002). An expansive interpretation of the inevitable disclosure doctrine would be inconsistent with these settled legal principles. 9. Accordingly, BBakeries has failed to satisfy any of the prerequisites for obtaining a preliminary injunction and its request must be denied. Respectfully submitted, /s/ Elizabeth K. Ainslie Elizabeth K. Ainslie (Pa. I.D. No ) SCHNADER HARRISON SEGAL & LEWIS LLP 1600 Market Street, Suite 3600 Philadelphia, PA (215) Dated: January 29, Counsel for Defendant Chris Botticella - 9 -

10 EXHIBIT A

34 CERTIFICATE OF SERVICE I hereby certify that on January 29, 2010, I caused a true and correct copy of the foregoing Defendant Chris Botticella s Proposed Findings of Fact and Conclusions of Law to be served upon the following counsel of record via the ECF System and first class mail. Michael L. Banks, Esquire Victoria L. Gorokhovich, Esquire Kasturi Sen, Esquire Morgan, Lewis & Bockius LLP 1701 Market Street Philadelphia, PA Counsel for Plaintiff Bimbo Bakeries USA, Inc. /s/ Elizabeth K. Ainslie Elizabeth K. Ainslie

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA. BBK Tobacco & Foods, LLP, an Arizona limited liability partnership, d/b/a HBI International,

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA. BBK Tobacco & Foods, LLP, an Arizona limited liability partnership, d/b/a HBI International, Case :-cv-0-fjm Document Filed 0/0/ Page of 0 GRAIF BARRETT & MATURA, P.C. Kevin C. Barrett, State Bar No. 00 Jeffrey C. Matura, State Bar No. 0 0 North Central Avenue, Suite 00 Phoenix, Arizona 00 Telephone: